Paying for Roads: Assembly Extends the Agony

BARRY RASCOVAR

June 23, 1991|By BARRY RASCOVAR

In mismanaging the state's transportation crisis, lawmakers in Annapolis are proving once again that most politicians have no sense of political timing. What could have been an ideal chance to quickly dispense with the distasteful chore of raising taxes has turned into a complete mess.

Legislators have known for several years that the state's transportation trust fund was going to need another cash infusion in 1991. Assembly leaders even conceded last summer that it was all but inevitable: road and mass transit projects are expensive and require more money than the fund brings in.

When the recession rocked Maryland last September, the transportation fund was especially hard hit. By December, Department of Transportation officials put a freeze on new projects to protect their dwindling cash reserves.

Part of this was a political ploy to help pave the way for passage of a five-cent hike in the gasoline tax and higher fees on motor vehicle licenses. But had the department not imposed that freeze, DOT would have gone broke by the spring. Transportation revenues continued to shrivel at an alarming rate.

This posed a perfect opportunity for lawmakers to solve DOT's money-raising needs quickly during their first year in office. By the 1994 elections, no one would remember the gas-tax hike of 1991. Political fallout could be minimized.

But lawmakers were still mesmerized by the "no more taxes" chant of voters in the 1990 elections. So the Assembly's fiscal leaders declared "no new gas tax."

By early April, at least the Senate had realized it had blundered and backtracked halfway by swiftly approving a bill to raise motor vehicle registration fees. Still, House Speaker R. Clayton Mitchell refused to yield. He felt DOT could make due for another year if it simply stretched its borrowing capacity.

The speaker was correct. DOT could pay for many more projects by issuing more bonds. Of course, that would mean a downgrading of DOT's securities as it issued more debt than it could afford. Of course, it would endanger Maryland's triple-A bond rating on its general obligation bonds. And of course, it would cost taxpayers far more in interest costs in the long run. But it would let House leaders avoid raising the gas tax until 1992.

As it turned out, DOT's cash crunch became so extreme this spring that Mr. Mitchell relented and agreed to raise licensing fees at a special session this Wednesday. But he vetoed suggestions that the Assembly also hike the gas tax at a special session already set for September. He'd rather spread the political pain over two years.

So instead of handling the transportation tax issue in a hurry, Mr. Mitchell and company have decided to keep the matter in the public spotlight for at least 18 months. As a result, the state's powerful road-building industry is furious with legislators. And so is the "no more taxes" crowd.

What a muddle they've made of it. Even some of the legislature's solutions are bizarre. For instance, Assembly leaders have agreed to raise motor vehicle fees -- but only if the money raised does not exceed 85 percent of the Motor Vehicle Administration's operating budget. No business in the world operates in such a cockeyed manner. Mr. Mitchell certainly doesn't run his Radio Shack store that way.

Why shouldn't the MVA fully recoup its overhead (or even make a slight profit) from the fees it charges? Shouldn't all government agencies who have the means to do so try to run on a break-even basis?

Apparently not, according to lawmakers.

When will this silliness end?

Another distasteful chore that legislators have to handle on Wednesday is a sixth round of budget cuts. This requires $125 million in deletions to balance the state budget. Yet when environmentalists and local governments screamed loudly about losing parkland funds, legislative leaders immediately leaned over backward to appease them: If there's any surplus when the fiscal year ends June 30, the extra money will go into the parklands program.

But wait. Advocates for the poor screamed almost as loudly about cuts in the state's housing loan program for low-income families. More appeasement: Those folks are now next in line for this surplus cash.

Of course, this ignores the fact that the Assembly wiped out a $125 million "rainy day" fund to balance the budget but won't be setting any surplus aside for future emergencies.

It also ignores the fact there may be far more pressing state obligations than developing new parks or underwriting a loan program.

And it shows flagrant disregard for an even more troubling reality: a $150 million deficit already projected for the fiscal year that starts July 1. Shouldn't any leftover money be used to reduce that projected deficit?

Again, the legislative answer appears to be "no."

With all this bumbling leadership in the legislature, Maryland could have a difficult time emerging any time soon from its fiscal crisis.

Barry Rascovar is deputy editor of the editorial pages of The Sun. His column on Maryland politics appears here each week.